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Homeowners Insurance
Buying homeowners insurance is important, and we’re here for you every step of the way. Discover what to consider when purchasing home insurance coverage to protect your belongings and your family.
By
Pat Howard
Expert reviewed
by
Fabio Faschi - PLCS, SBCS, CLCS
Updated April 21, 2021|3 min read
Table of Contents
Editorial disclosure
What is homeowners insurance?
Homeowners insurance protects you financially if something bad happens to your home. It also covers any damaged or stolen personal belongings, the cost of temporary hotel stays if your home is damaged, and legal expenses if you’re sued because of an accident.
Although homeowners insurance isn’t required in any state, most mortgage lenders will require proof of homeowners insurance before when you take out a home loan.
What does your home insurance policy cover?
Homeowners insurance protects your home and personal belongings from the different perils listed in your policy, including fire and lightning, wind and hail, theft, and water damage from burst pipes.
Your policy is broken up into six basic coverages that each serve a specific purpose and each have a maximum payout limit.
What are common types of homeowners insurance coverage?
Dwelling - Covers damage to the structure of your home, including your roof, foundation, built-in appliances, cabinets, and any attached structures.
Other structures - Covers damage to detached structures on your property, like your garage, shed, above-ground pool, or fence.
Personal property - Covers the cost of damaged or stolen personal belongings, including clothing, jewelry, and electronics.
Additional living expenses - Covers the costs of hotel stays and restaurant meals if your home is being repaired or rebuilt after a covered event, like a fire.
Personal liability - Covers legal and medical expenses if you or a family member are held liable for injury or property damage to others (like if your dog bites a neighbor).
Medical payments - Covers medical bills if a guest is injured on your property.
→ Learn more about what homeowners insurance covers
How much does homeowners insurance cost?
According to a 2020 report released by National Association of Insurance Commissioners (NAIC) , the average homeowners insurance premium was $1,249 annually (around $100 a month).
Your cost will depend on different factors, but the coverage amount is a good place to start. Here’s the average annual premium for different levels of dwelling coverage. To find the best rates in your state, check out our state-by-state home insurance guide.
| Coverage amount | Average annual premium | Per-month average premium |
|---|---|---|
| $100,000 to $200,000 | $956 | $32 |
| $200,000 to $300,000 | $1,114 | $37 |
| $300,000 to $400,000 | $1,272 | $42 |
| $400,000 to $500,000 | $1,482 | $49 |
| $500,000 and over | $2,148 | $72 |
What factors impact the cost of my homeowners insurance policy?
Your home - Your home’s age, location, square footage, and the number of rooms in the house will all affect your insurance rates.
Your coverage - Rates are directly tied to the amount of protection in your policy. Higher limits of liability, extended protection for your home and belongings, and additional coverage endorsements can all mean higher premiums.
Your credit score - Homeowners with poor credit are statistically more likely to file insurance claims, so a low credit score could mean higher rates.
Your claims history - If you’ve filed multiple insurance claims in the past, or your home has a history of structural damage and loss, your insurance premiums may be higher.
→ Learn more about how much homeowners insurance costs
The best homeowners insurance companies of 2021
There's a lot that goes into choosing a home insurance company, from cost to coverage options to claims satisfaction ratings. So which insurer offers the best homeowners insurance coverage at the best price?
| Homeowners Insurance Company | Policygenius Rating | Average Annual Cost | A.M. Best Rating |
|---|---|---|---|
| USAA | 8.7 | $2,112 | A++ |
| Amica | 8.5 | $2,004 | A+ |
| Encompass | 8.3 | $2,420 | A+ |
| Plymouth Rock | 8 | $1,165 | A- |
| Acuity | 8 | $1,260 | A+ |
| Chubb | 8 | $5,556 | A++ |
| Hippo | 8 | $1,499 | A- |
| State Farm | 8 | $1,500 | A |
| Nationwide | 7.7 | $1,736 | A+ |
| Travelers | 7.7 | $1,554 | A++ |
| State Auto | 7.6 | $1,803 | A- |
| Stillwater | 7.6 | $1,589 | A- |
| Swyfft | 7.6 | $1,296 | A- |
| Farmers | 7.5 | $1,476 | A |
| Tower Hill | 7.5 | $1,787 | A- |
| Allstate | 7.4 | $1,452 | A+ |
| Safeco | 7.3 | $1,683 | A |
| Mercury | 7.2 | $1,925 | A |
| AIG | 7 | $3,564 | A |
| Erie | 6.9 | $1,908 | A+ |
| GEICO | 6.6 | $1,740 | A++ |
| Progressive | 6.6 | $1,706 | A+ |
| MetLife | 6.5 | $2,467 | A |
How to buy homeowners insurance
Whether you’re insuring your first home or you're a current homeowner re-shopping for lower rates, buying home insurance is simple.
In fact, you can do it in just six steps. Here’s how it works:
Collect your info - You'll need to provide details about your home and living situation in order to get quotes. Re-shopping your policy? Have your current declarations page handy to make the process smoother.
Fill out an application - Apply online in under five minutes. We'll send personalized side-by-side policy options directly to your inbox.
Choose a coverage amount - You should have enough coverage to pay for a full rebuild of your home (known as the replacement cost). We'll recommend an amount when you apply. You may also need separate flood or earthquake insurance..
Choose a policy - A Policygenius expert will help you compare policies and discounts across companies to find the right coverage amount for the right price. We'll handle the paperwork for you — for free.
Welcome the inspector - Your insurance company will typically send someone to perform an exterior inspection of your home to make sure everything is in order.
Sign your policy - Once all the boxes are checked, you'll sign on that dotted line, pay your first premium, and relish the comfort of knowing that you and your stuff are covered.
→ Learn more about how to buy homeowners insurance
How to find affordable homeowners insurance
Homeowners insurance doesn’t need to cost a fortune. To keep your coverage affordable, consider the following cost-saving steps.
1. Compare quotes from different companies
Shopping for coverage using a marketplace like Policygenius is a good way to find the most affordable homeowners insurance. Make sure to compare policy options and rates from at least three different insurance companies to ensure you’re getting the best price.
2. Get your replacement cost right
Your rates will depend on how much coverage you need, so be sure to get an accurate replacement cost estimate of your home before you start shopping for insurance. If you’re comparing quotes using a replacement cost estimate that doesn’t reflect the actual rebuild value of your home, you may accidentally pay too much for coverage.
3. Raise your policy deductible
Your policy deductible is the out-of-pocket amount that you’re responsible for paying before your insurer will cover a loss. The higher your deductible, the cheaper your rates will be. But be careful not to raise your deductible so high that you wouldn’t be able to afford it in a worst-case scenario.
4. Take care of your credit
A good credit score signals to your insurance company that you’re financially stable and less likely to file insurance claims. If you have good credit, you’ll get better rates.
5. Look into discounts
Most insurance companies offer lots of policy discounts and credits. Some typical discounts include:
Multi-policy discount. Bundle two or more insurance policies, like home and auto, with the same company to save as much as 20% on coverage.
Protective devices discount. If your home has deadbolts, storm-resistant roofing, and centralized fire and burglar alarms, you’ll be eligible for a discount.
Claim-free discount. Many insurers will lower your insurance rates if you haven’t filed a claim in the last 3-to-5 years.
Loyalty discount. Expect a big discount if you’ve been insured with the same company for 5 years or longer.
First-time homebuyer discount. Most insurance companies will offer discounts if you’re insuring a newly-built home or if you recently purchased a home.
→ Learn more about how to find home insurance discounts
Our ranking methodology
Policygenius takes an editorially-minded approach to our homeowners insurance reviews, ranking each insurance company on various factors that are most important to our customers. We don’t get paid for reviews, and we analyze each company on the same extensive set of criteria to create unbiased insight into what to expect from each insurer.
→ Check out all of our home insurance company reviews
Need help? Policygenius’ licensed experts can help you from start to finish so you can feel confident and comfortable with your home insurance decisions.
→ Get started with a free rate comparison
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Frequently asked questions
How much is home insurance?
Homeowners insurance costs, on average, a little more than $100 a month, or around $1,250 a year. Your cost will depend on a number of factors like where you live, the construction of your house, your deductible, and more. Discounts are a common way to make your policy more affordable.
How can I lower my home insurance rates?
There are several ways to make your home insurance more affordable. Be on the lookout for discounts from your company, like multi-policy discounts, first-time homebuyer discounts, and claim-free discounts. You can raise your deductible, but beware that this means you'll pay more out of pocket before the carrier pays out a claim. Most importantly, compare multiple companies while you're shopping to make sure you're getting the right coverage for the right price.
Which insurance company is best for homeowners?
There's no one-size-fits-all home insurance company for anyone. You'll want to find a company that offers policies in your state, and choose the one that offers the coverage you need at the most affordable cost. Look for companies that offer discounts, like bundling your home and auto insurance. Comparing companies before you buy is the best way to arrive at the right choice.
What does home insurance cover?
Your homeowners policy consists of different types of protection, like dwelling, personal property, and medical payments coverage. Your home insurance protects your property from perils listed in your policy, including fire, wind, and theft.
How much home insurance do I need?
Homeowners insurance coverage needs depend on your specific house. In general, your coverage amounts should be high enough to cover your home’s rebuild cost, the monetary value of your personal belongings, and your combined assets. If you need flood or earthquake coverage, you'll need to buy those separately.
Are there different homeowners insurance requirements by state?
No, homeowners insurance is not required by law in any state. However, most lenders will require proof of home insurance before letting you close on a property.